(asked on 22nd July 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment his Department has made on the effect of reforming RPI to align with CPIH on pension schemes deficits.

Answered by
John Glen Portrait
John Glen
Economic Secretary (HM Treasury)
This question was answered on 7th September 2020

The Retail Prices Index (RPI) is a measure of inflation with a number of shortcomings. To address these shortcomings, the UK Statistics Authority (UKSA) has made a proposal to reform RPI by bringing the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI. Owing to the use of RPI in specific index-linked gilts, prior to 2030 the Chancellor’s consent to this proposal is required before it can be implemented.

At the Budget in March, the government and UKSA launched a consultation to consider whether UKSA’s proposal should be implemented at a date other than 2030, and, if so, when between 2025 and 2030. The consultation closed for responses on 21 August. As part of the consultation, the government has invited views on matters including how the holders of the government’s issues of index-linked gilts, all of which use RPI as their reference rate, will be affected by the implementation of reform. As noted in this year’s Debt Management Report, pension funds are a major holder of index-linked gilts. The consultation also contained a section which invited views on the broader impacts of the proposed reform of RPI.

The government and UKSA will respond to the consultation in the autumn.

This content was generated for your convenience by Parallel Parliament and does not form part of the official record.
Recent Documents related to Pensions

1. Proposed Changes to RPI: a GAD technical bulletin
24/01/2020 - Government Actuary's Department
- View source

Found: January 20 20 Followin g the Chancellor of the Exchequer's reply to the UK Statistics Authority

2. A consultation on the Reform to Retail Prices Index (RPI) Methodology
16/04/2020 - HM Treasury
- View source

Found: How the RPI will change Section 4 The technical approach to bringing CPIH methods and data

3. A response from Sajid Javid to Sir David Norgrove on UKSA’s proposed reform of the Retail Prices Index, and the Government’s response to the House of Lords Economic Affairs Committee report, “Measuring Inflation”.
04/09/2019 - HM Treasury
- View source

Found: SENSITIVE Rt Hon Philip Hammond MP Chancellor of the Exchequer (via email)

4. Occupational pension increases
09/11/2018 - Parliamentary Research

Found: Number CBP-5656, 9 November 2018 Occupational pension increases By Djuna Thurley Contents: 1. Introduction

5. Letter from the Chair of the UK Statistics Authority to the Chair of the Economic Affairs Committee, House of Lords, regarding the consultation into changes to RPI, 13 January
17/03/2020 - Inquiry: Letter from the Chair of the UK Statistics Authority to the Chair of the Economic Affairs Committee, House of Lords, regarding the consultation into changes to RPI, 13 January - Treasury Committee
- View source

Found: January 2020 Dear Lord Forsyth , The Chancellor of the Exchequer has written to you about the timing of

Latest Documents
Recent Speeches related to Pensions

1. Inflation
01/07/2019 - Lords Chamber

1: with the committee last year. He told us that the RPI had “known errors”, should not be further embedded - Speech Link

2. Rating and Valuation
04/02/2020 - Commons Chamber

1: multipliers would rise in line with the preceding year’s RPI figure. On this basis, the multipliers were due to - Speech Link
2: Looking forward, as confirmed in the statement I made on 27 January, from 1 April this year the Government - Speech Link
3: argument about the use of RPI as an inflation indicator, as against CPI and CPIH. RPI was de-designated as - Speech Link

3. Finance (No.2) Bill (Third sitting)
27/04/2021 - Public Bill Committees

1: impact of section 98—“(1) The Chancellor of the Exchequer must review the impact on investment - Speech Link
2: The Treasury will also work closely with the Department for Business, Energy and Industrial Strategy - Speech Link
3: individual sectors. I know that the waste sector made a representation to the Treasury arguing that removing - Speech Link

4. Guaranteed Minimum Pensions Increase Order 2020
03/03/2020 - Grand Committee

1: defined benefit or final salary occupational pension schemes. It will increase scheme members’ guaranteed - Speech Link

5. Oral Answers to Questions
21/05/2019 - Commons Chamber

1: we are actively pursuing the promoters of these schemes in exactly the way in which the hon. Gentleman - Speech Link
2: including groups like the Women Against State Pension Inequality, without Ministers fulfilling their - Speech Link
3: is no need for people to get involved in these schemes, the sole purpose of which is to avoid tax. Some - Speech Link

Latest Speeches
Recent Questions related to Pensions
1. Pension Schemes Bill (HL)
asked by: Angela Eagle
... what the timetable is for the implementation of (a) new criminal offences and (b) information-gathering powers contained in the Pension Schemes Bill; and whether they will apply (i) retrospectively and (ii) to pension schemes that have already closed.

2. Pension Schemes Bill (HL)
asked by: Wendy Chamberlain
... by what means she plans to ensure that none of the provisions in Part 3 can be applied retrospectively.

3. Pension Schemes Bill (HL): Queen's Consent
asked by: Lord Berkeley
...To ask the Senior Deputy Speaker why Queen's Consent was required in respect of the Pensions Schemes Bill.

4. Department for Work and Pensions: Pilot Schemes
asked by: Lord Field of Birkenhead
... what departmental pilot projects are active in (a) Birkenhead and (b) Wirral.

5. Department for Education: Employment Schemes
asked by: Jo Stevens
... whether his Department plans to fund employment schemes that were launched on 26 January 2016 after the UK leaves the EU.

Latest Questions